Types of Business Structures and Management Skills

Sole trader

A business owned by one person who is entitled to keep all profits after tax has been paid but liable for all losses.

Partnership

Is a business that is owned by between 2 and 20 people.

Private Company

An incorporated business that is owned by between 1 and 50 shareholders.

Public Company

An incorporated business that is owned by shareholders and has no upper limit to the number of shareholders. Shares are openly traded on the Australia Securities Exchange (ASX).

Social Enterprise

Private sector business that distributes surplus funds to benefit the community rather than individual shareholders.

Government Business Enterprise (GBE)

A business that is government owned. GBEs seek to run profitably by controlling costs and selling their goods and services at a price to cover costs.

Objective

A goal that the business wants to achieve within a specified period of time.

Strategic Objectives

2 -5 years, Senior Management

Tactical Objectives

1-2 years, middle management

Profit

Money left over after expenses are deducted from revenue earned.

Operational Objective

Less than 12 months, frontline management.

Make a profit

Business objective related to financial performance

Fulfil a market need

Business objective involves addressing consumer demands

Meet shareholder expectations

Business objective that focuses on the interests of investors

Improve effectiveness

Business objective aimed at enhancing operational performance

Increase market share

Business objective that involves expanding the company's presence in the market

Fulfil a social need

Business objective focuses on contributing positively to society

Improve efficiency

Business objective that aims to reduce waste and optimise resources

Market share

The proportion of sales that a business or product has compared to the total sales in the industry, expressed as a percentage.

Fulfil a market need

Business aims to provide goods or services that fill a gap in the market and therefore meet customer demand.

Social Objectives

Relates to the role of a business in the community and how they can improve the lives of others or the environment.

Shareholder Expectations

Expectations that the business will make a profit and for any shares purchased to increase in value and to receive dividends.

Efficiency

How well a business has used its resources to achieve its stated objectives.

Effectiveness

The degree to which a business has achieved its business objectives.

Stakeholder

An individual or group that has a direct or vested interest in the activities of a business.

Manager

A professional who takes a leadership role in an organisation and manages a team of employees.

Autocratic

A management style where all decisions making is centralised, there is little delegated authority and communication is one way - downwards.

Persuasive

A management style where the manager makes a decision and convinces workers of the benefits of those decisions. Decision-making is centralised and communication is one-way downwards.

Consultative

A management style with centralised decision making and two-way communication. The manager asks employees their opinions when discussing an issue, however management makes the final decision.

Participative

A management style with two way communication and decentralised decision-making; management and staff work together as a team to make decisions.

Laissez-faire

A management style with decentralized decision-making and two way communication; management leave the majority of decision-making and running of the business to employees.

Communication

Process of creating and exchanging information between people that produces the required response.

Delegation

Passing of authority down the hierarchy to perform or make decisions.

Planning

Process of determining objectives and devising strategies in order to achieve them.

Leading

The skill of a manager to influence and motivate employees towards the achievement of business objectives.

Decision-Making

A multi-step approach whereby a selection is made between a range of different alternatives.

Interpersonal

Skills used every day to understand and interact with other people, both individually and in groups.

Corporate culture

The shared values and beliefs of people within a business.

Management Style

The manner and approach of providing direction, implementing plans and motivating people.

Official Corporate culture

The set of shared values and beliefs that the business wants its people to display

Real Corporate Culture

The actual shared values and beliefs that are displayed by the people in a business